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Luxury Brands in China - TBG

The Bergstrom Group is an insights and trends consultancy helping marketers understand and connect with Chinese consumers. Through thoughtful research, rich narratives and actionable insights, we are helping to tell the story of new China.

Luxury Brands in China - TBG

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INTRODUCTION Luxury is making some big moves in China. As analysts juggle the numbers to determine the market potential, we are pausing to appreciate the changing notions of luxury among Chinese youth. Past blindly following formulaic expressions of wealth, many youth are looking for less expected ways to express status and tell their peers that they are “worth it.” Photos thanks to trendspotter: Zhouwei.

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Luxury Brands’ Digital Strategies Rated Even though Chinese spend more time online than most of their international peers, brands in China have been slow to organize and execute their stories online. 1. Lancôme led the way by being localized, leveraging Baidu and managing its own community “Rose Beauty” launched in 2006 and now claiming 4 million users. 2. BMW rated second, developing a driver’s club online counting 150,000 members. 3. Cosmetics brand Estée Lauder tied BMW by creating their own China-specific site with content about products and celebrities. And some more obvious Chinese favorites… 19. Louis Vuitton 27. Gucci To see the report: http://www.l2thinktank.com/chinadigitaliq/L2_China_Digital_IQ.pdf

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A cake at Wow! Cake could be 6,000 Yuan and a 6’’ big LV bag cake is 760 Yuan. (Wow! Cake set up its store in Shanghai in 2009. ) Jillion, as in you got to have one to afford one, is one of the many luxury car dealerships in Shanghai. May, 2010, Salvatore Ferragamo released its new series, including bags, purses and T-shirts, with Chinese artist Xue Song at Ferragamo’s store in Shanghai.

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Is Luxury Only About Brands? Notions about what is luxurious are changing. A luxury item for a consumer isn’t always a commonly understood luxury brand. What makes an item luxurious is how it makes the consumer feel and what it says to the outside world. As a super fan of Bruce Lee, Clear (trendspotter, 24, male, Beijing, independent director) has spent 3 years collecting more than 30 toys in his hero’s image. He sees his collection as luxury items because on one hand, each toy costs over 2000 Yuan; on the other hand he believes that Bruce Lee is a brand. To see the post, click here .

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I have heard about Paris for so long that when you say luxury, I think of Paris fashion and dessert. – Cynthia, 23, female, Shanghai, executive assistant Cosmetics products from France are very good, expensive and 100% natural. – Kiki, 27, female, Shanghai, boutique sales I think most people will associate France with luxury because it is just so classic. I think they have the techniques to design great brands. – Jay, 24, male, Nanjing, travel agent

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Made -in-China Luxury Take-away: Respondents had faith in the techniques and processes used in made in China but didn’t trust how brands treat Chinese consumers.

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To be honest, I’m not sure how many luxury brands are actually made in their own countries. A lot of them are made in China but why do we still have to pay much more compared to the consumers overseas? – Winnie, 23, female, Shanghai, HR representative When I think of things made in China, I associate a lack of delicacy, customization, and good after-sales service. – Sophie, 22, female, Shanghai, PR Brands don’t sell their best quality goods to Chinese, even if they are made here. Contrary to the Japanese, we send our best goods to other countries, and the left-overs and poor quality items are left here to be sold. – Cynthia, 23, female, Shanghai, executive assistant

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Designed -in-China items? Take-away: While Chinese design may be good, our respondents are still undecided if Chinese design is valuable (worth a luxury price tag).

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Pros: It doesn't matter whether at home or abroad as long as the design of the product is special and unique. – Sophie, 22, female, Shanghai, PR Designed in China would be sold overseas but not necessarily in China. But I believe we can design. I would buy high-end Chinese brands. I support Chinese goods. – Cynthia, 23, female, Shanghai, executive assistant

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Cons: I’m not a fan. I think we are good at making but not good at designing. We are short on creativity, I’m afraid. – Jay, 24, male, Nanjing, travel agent I don’t know of any but I don’t think I would buy it anyway. A luxury brand needs time to prove its value. What’s more, I believe western brands have better design. – Lena, 25, female, Shanghai, computer programmer

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<ul><ul><li>OUR STORY </li></ul></ul><ul><ul><li>Established in 2006, The Bergstrom Group has developed a reputation for providing vivid customer immersions for brands and agencies. We began our commitment to China by focusing on youth and have since broadened our scope to include women and lower tier consumers. </li></ul></ul><ul><ul><li>Based in Shanghai, our on-the-ground team of subject matter experts, researchers, trendspotters and photographers is dedicated to telling the story of new China in a way that is both authentic and actionable. </li></ul></ul>